Local Polynominal Estimation of Option-trading Function

This article starts from the option-trading price,using nonparametric regression methods to estimate option-pricing function. It first gives out the local polynominal estimation of option pricing function,then makes use of Black-Scholes’ function to discuss the establishment of window width, and then presents two steps estimation methods of option pricing function. Finally, it, makes the practical calculation oil the data of Sterling future option of Chicago Mercantile Exchange.